The Swedish Krona has this week moved up to equal 4th (out of 10) in our medium-term rankings, moving out of the bearish category for the first time since May. For much of the summer it was at number 10 and as recently as three weeks ago was down at number 9. After a long period of under performance, the question now is whether this marks the start of a lasting improvement, or whether the gains are purely corrective and underlying weakness will resume again quite soon?

To try and find a clearer answer to this I have analysed the Swedish Krona against all of the other 10 major Currencies, ranging from the very strongest currencies in our rankings (US & Canadian Dollars) all the way down to the Australian & New Zealand Dollars which currently occupy the last places.

Left chart USD/SEK, middle chart CAD/SEK, right chart GBP/SEK. [Click on each chart for a larger image]

The first thing I have noted is that multi-week base patterns for the Swedish Krona have been completed over recent weeks against the EUR, JPY, CHF, NZD, AUD & NOK, IE the majority of the other major Currencies, but not against the USD, CAD or GBP (the three charts shown above), which remain the top three in our medium-term rankings. But in all cases the SEK remains below the key 260 day (1 year) moving average, which is still falling across the board, warning that the major underlying trend remains bearish at this stage. The Swedish Krona has outperformed the majority of Currencies over recent weeks but in many cases in now undergoing a setback, to a varying degree, such as against the JPY, NZD & AUD (the three charts below). This may last another 1-2 weeks, ahead of attempts to resume the recovery phase. However, this may be potentially quite limited before forming a key lower top for a resumption of the broader Swedish Krona decline in the months ahead.

Left chart SEK/JPY, middle chart SEK/NZD, right chart SEK/AUD. [Click on each chart for a larger image]

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Steve Jarvis is the Senior Technical Analyst for the TraderMade Research services.
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